Blue Skies: What Aviation Finance Might Offer

Aircraft leasing is maybe not something that the average investor thinks about every day, but we think there's a very compelling case to be made for inclusion in your portfolio.

We have 50 years of data that show us that commercial aviation grows at a multiple to global GDP. What is driving that? It's really a middle class, an expansion of the middle class, and in particular, it's an emerging markets phenomenon. As we have in emerging markets the middle class expanding and people having some disposable income, we've got both the means to travel and the motivation to travel.

Aircraft leasing offers visibility to cash flows. You have contractual cash flows attached to a specific asset, and in addition, you've got actual operating asset dynamics. These are portable assets. They're relatively generic in production and layout. So it's very easy to take an aircraft out of an underperforming market and redeploy it in a performing market. And that's not something that commercial airlines can do.

This sector is surprisingly uncorrelated, both to the broad market but also to peer-investing strategies—things like real estate or infrastructure or even commercial aviation itself.